Sensex advances 2.3% on new stimulus plan

New Delhi: Shares prices rose on Friday, led by ICICI Bank Ltd, after acting finance minister Pranab Mukherjee said the government would announce additional measures to arrest the economic slowdown.

ICICI Bank rose 4.2%, gaining for the second day. Reliance Industries Ltd (RIL) advanced 4.4% after a report said that new oil drilling rigs would be delivered this year, raising speculation it will boost earnings.

“Every government from Russia to Japan to the US is doing something or the other to prop up the economy, which should at least stop them from slowing further,” said Mumbai-based P.R. Dilip, managing director at Impetus Wealth Management Ltd.

India, where the economy may grow by about 7% in the year ending 31 March, will take steps aimed at protecting labour-intensive industries, Mukherjee said on Friday. The government has so far announced two stimulus packages, including tax cuts and capital injections for banks.

Automobile shares climbed as sales increased on lower interest rates. Tata Motors Ltd surged 4.9%, to Rs137.50, the most in more than a month. Mahindra and Mahindra Ltd rose 3.4% to Rs274.65.

Maruti Suzuki India Ltd rose 0.1% to Rs577.70. Easier credit led Maruti to post higher sales in the country last month and may help revive auto demand in the world’s second fastest growing major economy. That contrasts with plummeting sales in Suzuki’s home market of Japan and in the US.

Maytas Infra Ltd shed Rs3, or 5%, to Rs57.10. The company controlled by the family of arrested Satyam founder B. Ramalinga Raju, fell by the 5% limit for the 21st-straight day, to Rs57.10. It has sent a legal notice to Vedanta Aluminium Ltd for illegally encashing its bank guarantees. Vedanta Aluminium had converted to cash two bank guarantees worth Rs64 crore on 20 January.